Orange County Business : Lenders Accepting Lower Down Payments

With the recent home refinancing boom slowing, mortgage lenders are again courting Orange County consumers by requesting smaller down payments, according to TRW Redi Property Data in Riverside.

Between January and April, 16% of the home loans made in Orange County required a conventional down payment of less than 10%, according to TRW Redi data. In contrast, just 4% of mortgages made during the same period in 1991 included down payments of less than 10%.

Historically, homeowners who put down less than 10% of a home’s value have been perceived by lenders as greater credit risks.

“Mortgage lenders are obviously under pressure to increase their market share, said Nima Nattagh, TRW Redi’s market analyst. But the trend toward lower down payments, he said, “could potentially lead to greater market instability in the future.”